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Star Health Q2 Shock: Profit Plunges 54% Despite Revenue Growth

Star Health faced a challenging second quarter with profits falling sharply despite revenue growth. The company's net profit dropped 54% year-over-year to Rs 54.9 crore. However, premium earnings showed strength with a 10% increase to Rs 4,080 crore. Management remains optimistic about growth opportunities from GST exemptions on retail health insurance.

Key Points: Star Health Q2 Net Profit Falls 54 Percent Despite Revenue Rise

  • Net profit dropped 54% to Rs 54.9 crore from Rs 110 crore YoY
  • Premium revenue grew 10.27% to Rs 4,080 crore despite profit decline
  • Total expenses increased 9% YoY to Rs 4,284.9 crore, impacting margins
  • Combined ratio improved to 101% from 104.8% despite profitability challenges
2 min read

Star Health Q2 net profit falls 54 pc despite rise in revenue

Star Health reports 54% profit decline to Rs 54.9 crore in Q2 FY26 despite 10% revenue growth, as expenses rise and margins face pressure.

"We are noticing strong tailwinds following the GST exemption on retail health insurance - Anand Roy, MD & CEO"

Mumbai, Oct 28

Star Health and Allied Insurance Company on Tuesday reported a sharp over 50 per cent decline in its net profit to Rs 54.9 crore for the second quarter of the current financial year (Q2 FY26), compared to Rs 110 crore in the same period last year.

The health insurer, however, registered healthy revenue growth (premium earned net), which rose 10.27 per cent year-on-year to Rs 4,080 crore from Rs 3,700 crore in the corresponding quarter of the previous fiscal.

The fall in profitability comes despite improved topline performance, suggesting pressure on margins likely due to higher claim ratios and increased operating expenses.

The total expenses for the quarter stood at Rs 4,284.9 crore, up over 9 per cent YoY from Rs 3,898.5 crore, and over 10 per cent QoQ from Rs 3,866.54 crore.

According to its exchange filing, the company's net profit plunged over 79 per cent quarter-on-quarter from Rs 262.5 crore in the April-June quarter (Q1 FY26).

"Customer experience continues to be a cornerstone of Star Health’s strategy. Our claims NPS improved from 52 to 61, and the overall company NPS has improved from 59 to 61. These outcomes reflect the consistency of our execution and the strength of our retail-focused model," MD and CEO Anand Roy said.

"We are noticing strong tailwinds following the GST exemption on retail health insurance. Early trends indicate a clear uptick in demand—reflected in stronger lead generation, new policy issuances, and GWP growth in October—underscoring the rising affordability," he added.

In Q2FY26, the expense ratio of the company improved to 29.3 per cent from 31.1 per cent in Q2FY25.

"The loss ratio improved to 71.8 per cent in Q2FY26 from 73.7 per cent in Q2FY25. The combined ratio (IFRS basis) improved to 101 per cent from 104.8 per cent in the same period last year," the company said.

The company continued to advance its technology-driven customer experience, implementing an AI-enabled claims platform for faster and seamless settlements. The Star Health app has now crossed 12 million downloads, it said in an exchange filing.

- IANS

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Reader Comments

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Priya S
At least the revenue is growing and they're improving customer experience. The GST exemption on health insurance is a great move by the government - will definitely help middle-class families like mine afford better coverage. 👍
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Arjun K
The numbers don't add up. Revenue up 10% but profit down 54%? Either their operational costs are out of control or there's something else going on. As an investor, I'm worried about the QoQ drop of 79% - that's alarming!
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Sarah B
I appreciate that they're focusing on technology and customer experience. The AI-enabled claims platform sounds promising. In India, where healthcare costs are rising rapidly, efficient claim settlement is crucial for policyholders.
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Vikram M
The combined ratio at 101% means they're barely breaking even on underwriting. This is typical in Indian health insurance - high claims due to rising medical inflation. Hopefully the GST exemption helps them turn around.
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Ananya R
While the profit drop looks bad, the improving loss ratio and expense ratio show they're making operational improvements. Sometimes short-term pain is needed for long-term gain. The 12 million app downloads show good customer engagement. 📱

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